NAC 677.010Definitions. (NRS 677.380)As used
in this chapter, unless the context otherwise requires, the words and terms
defined in NAC 677.020 to 677.110,
inclusive, have the meanings ascribed to them in those sections.

(Supplied in codification; A by Comm’r of Financial
Institutions, eff. 12-17-87; R101-01, 11-15-2001)

NAC 677.020“Acquiescence” defined. (NRS 677.380)“Acquiescence”
means the procedure of reviewing forms, documents, plans of business and other
submissions, and the notice given by the Commissioner to thrift companies in
writing that he does not object to their use.

NAC 677.050“Capital and surplus not available for dividends” defined. (NRS 677.380)“Capital
and surplus not available for dividends” as used in NRS 677.760 means the sum of
capital stock, capital surplus and undivided profits to the extent of 10
percent of the capital stock.

NAC 677.070“Capital surplus” defined. (NRS 677.380)“Capital
surplus” means that amount paid or contributed by the shareholders in
accordance with the requirements of this chapter and chapter 677 of NRS.

(Added to NAC by Comm’r of Financial Institutions by
R101-01, eff. 11-15-2001)

NAC 677.080“Impaired capital” defined. (NRS 677.380)“Impaired
capital” means that the minimum amount of capital, required by NRS 677.210 to be maintained in the
capital stock and capital surplus accounts, is reduced by a deficit balance in
the company’s undivided profit account. After the undivided profits have
reached 10 percent of capital stock, capital will be considered to be impaired
if the undivided profits fall below this level.

NAC 677.110“Paid-up and unimpaired capital and unimpaired surplus” defined. (NRS 677.380)“Paid-up
and unimpaired capital and unimpaired surplus” as used in subsection 1 of NRS 677.620 means the sum of
capital stock, capital surplus and undivided profits, so long as this total
does not fall below that required by NRS
677.210.

1. A licensee shall pay annually to the
Division of Financial Institutions of the Department of Business and Industry a
fee of $750 for the renewal of his license.

2. If the Commissioner of Financial
Institutions reinstates an expired license, the licensee shall pay a
reinstatement fee of $300 in addition to the renewal fee prescribed in
subsection 1.

(Added to NAC by Comm’r of Financial Institutions by
R109-06, eff. 6-28-2006)

REQUIRED ACQUIESCENCE AND APPROVAL OF COMMISSIONER

NAC 677.150Approval required to pledge assets. (NRS 677.380)No
assets of the thrift company may be pledged to secure payment of the bond or
letter of credit without the express written permission of the Commissioner.

1. Before the articles of incorporation of a
thrift company are filed with the Secretary of State, a draft of the articles
must be submitted to the Commissioner for acquiescence.

2. Any proposed amendments to the articles
must also be submitted to the Commissioner for acquiescence before they are
filed with the Secretary of State.

3. Within 10 days after the articles of
incorporation or amendments to the articles have been filed with the Secretary
of State, a copy of the articles or amendments showing the date of filing must
be filed with the Commissioner.

1. A draft of the bylaws must be submitted
to the Commissioner for acquiescence before adoption. Any proposed amendments
to the bylaws must also be submitted to the Commissioner for acquiescence
before adoption.

2. Within 10 days after the bylaws or
amendments thereto have been adopted, a copy of the bylaws or amendments
showing the date of adoption must be filed with the Commissioner.

1. Any voting trusts or pooling agreements
by and between shareholders must be in writing and submitted to the
Commissioner for acquiescence before they become effective. A copy of the
voting trust or pooling agreement will be retained by the Commissioner.

2. All proxy agreements must be in writing
and submitted to the Commissioner for acquiescence before they become
effective. A copy of all proxy agreements will be retained by the Commissioner.

NAC 677.190Requirements for acquiescence. (NRS 677.380)The
Commissioner will not acquiesce in the capital structure of a thrift company
unless the structure:

1. Is based on par value stock;

2. Provides that the holders of all issued
and outstanding common voting stock are assessable in accordance with the
provisions of this chapter, or in accordance with any order, directive or
demand of the Commissioner; and

3. Provides that all borrowings, exclusive
of thrift certificates, are subordinate to the claims of the thrift certificate
holders.

1. Appropriate proof that the minimum
capital requirements of NRS 677.210
have been paid to the corporation in cash must be presented to the Commissioner
before a thrift company license is issued.

2. No money obtained from the sale of debt
securities may be used for meeting the initial minimum capital requirements of NRS 677.210.

3. For purposes of subsection 1 of NRS 677.540 and NRS 677.620, any money obtained
from the sale of debt securities may not be considered part of the company’s
capital structure without the express written permission of the Commissioner,
and no repayment of debt securities that are considered part of the company’s
capital structure may be made without the express written permission of the
Commissioner.

4. The Commissioner will not give his
permission to consider money obtained from the sale of debt securities as part
of the company’s capital structure unless the rights of the holders of the debt
securities are subordinated to the rights of the holders of the thrift
certificates.

5. The Commissioner may refuse to give his
permission to consider money obtained from the sale of debt securities as part
of the company’s capital structure if he reasonably believes that a refusal is
in the best interests of the company or the holders of the thrift certificates
or that a refusal is needed to accomplish the purposes of chapter 677 of NRS.

1. The capital surplus account may consist
of money contributed to the company, money transferred to it from the company’s
undivided profits account or money obtained through the sale of shares.

2. Money contributed must be earmarked
“contributions,” money transferred from the company’s undivided profit account
must be earmarked “transferred from undivided profits,” and money obtained through
the sale of shares must be earmarked “sales.”

2. No dividends may be declared or paid if
the declaration or payment would reduce the undivided profits account below 10
percent of the balance in the capital stock account.

3. No thrift company may declare any
dividend to its shareholders except on April 30, July 31, October 31, or
January 31.

4. No dividend may be paid to the company’s
shareholders unless all interest due for the previous quarter has been paid to
the company’s certificate holders, and unless all interest due has been paid to
the holders of the company’s debt securities.

5. No dividend may be paid to the company’s
shareholders unless all lawful claims and demands for withdrawal by certificate
holders for the previous quarter have been paid.

1. If the capital of the company is
impaired, or if the company has issued thrift certificates in excess of the
limitation of subsection 1 of NRS
677.620 or if the company has exceeded the borrowings as limited by
subsection 4 of NRS 677.620, the
Commissioner may require that:

(a) Money sufficient to cure the impairment or
violation be transferred from the company’s undivided profit account to the
capital or capital surplus account within 30 days after receipt of the order of
the Commissioner to do so;

(b) The company cease issuing thrift certificates
until such time as the impairment or violation is cured; or

(c) The holders of all common voting stock pay to
the corporation on a pro rata basis enough money to cure the impairment or
violation within 30 days after receipt of the order of the Commissioner to do
so. The company must notify each common voting stockholder of the amount and
terms of the assessment.

2. If, within 30 days after the thrift
company has received notice of the requirements of the Commissioner, the
impairment or violation is not cured, the Commissioner may forthwith take
possession of the property and business of the company until its affairs are
finally liquidated as provided by law.

3. This section does not limit any other
remedies the Commissioner may have to cure impairments or violations.

NAC 677.270Limitations on lending. (NRS 677.380)No
thrift company may have outstanding total amounts of cash advanced as defined
in NRS 677.030 plus the net
amount owed to the thrift company on any item listed in subsection 1 of NRS 677.790 which in the aggregate
exceeds 11 times its unimpaired capital.

1. A thrift company may not incur a selling
expense in connection with the sale of its shares in an amount in excess of 10
percent of the amount of cash paid by the purchaser on the selling price
thereof.

2. A thrift company may not pay commissions
for the sale of its shares to an officer or director of the company nor to
anyone directly or indirectly who is not a broker or an agent licensed under chapter 90 of NRS.

1. Every sale, transfer, encumbrance or
pledge of shares as a security interest, or other hypothecation, of a company’s
voting stock and every sale, transfer, encumbrance or pledge of shares, or
other hypothecation, of more than 10 percent of a company’s issued nonvoting
stock must be acquiesced in by the Commissioner before such sale, transfer,
encumbrance or pledge, or other hypothecation, becomes effective.

2. A sale, transfer, encumbrance or pledge
of a share as a security interest, or other hypothecation of a company’s
nonvoting stock that results in any natural person, company or other entities
owning more than 10 percent of a thrift company’s issued nonvoting stock must
be acquiesced in by the Commissioner before such sale, transfer, encumbrance or
pledge, or other hypothecation, becomes effective.

1. On or before June 30 of each year, the
Commissioner of Financial Institutions will collect a fee from each thrift
company for the supervision and examination of the thrift company pursuant to chapter 677 of NRS.

2. The fee is based on the portion of the
annual appropriation from the State General Fund to the Division of Financial
Institutions that is attributable to the supervision and examination of thrift
companies. Each thrift company shall pay a share of that amount as determined
by the following schedule:

Total
Assets

Base Fee

+ Fee
Exceeding Base

Less than
$5,000,000

$5,000

N/A

$5,000,000 or more, but

5,000

$.25 per
thousand of

less than $10,000,000

assets exceeding

$5,000,000

$10,000,000 or more, but

6,250

$.19 per
thousand of

less than $50,000,000

assets exceeding

$10,000,000

$50,000,000 or more, but

13,850

$.12 per
thousand of

less than $100,000,000

assets exceeding

$50,000,000

$100,000,000 or more, but

19,850

$.10 per
thousand of

less than $500,000,000

assets exceeding

$100,000,000

$500,000,000 or more, but

59,850

$.07 per
thousand of

less than $1,000,000,000

assets exceeding

$500,000,000

$1,000,000,000 or more, but

94,850

$.05 per
thousand of

less than $3,000,000,000

assets exceeding

$1,000,000,000

$3,000,000,000 or more,

194,850

$.03 per
thousand of

but less than

assets exceeding

$10,000,000,000

$3,000,000,000

$10,000,000,000 or more,

404,850

$.02 per
thousand of

but less than

assets exceeding

$20,000,000,000

$10,000,000,000

Any adjustment to the fee required to account for the
distribution of unused portions of or increases in the annual appropriation
from the State General Fund must be made in a proportionate amount that is
based on the relationship that the fee determined for each thrift company
pursuant to paragraph (a) bears to the total fee imposed on all thrift
companies licensed pursuant to chapter 677
of NRS.

3. If the fee is not paid on or before June
30, the Commissioner will assess a penalty of 10 percent of the amount of the
fee and an additional 1 percent of the fee for each month or portion of a month
that the fee is not paid. The Commissioner may waive the penalty for good
cause.

4. The fee does not include the cost of any
extraordinary examination, audit, investigation or hearing conducted by the
Division. The cost of any such examination, audit, investigation or hearing is
$60 per hour.

1. Except as otherwise provided in NAC 658.030, each licensee shall pay to
the Division of Financial Institutions of the Department of Business and
Industry an annual assessment of $300 to cover the costs related to the
employment of a certified public accountant and the performance of audits and
examinations conducted by the Division.

2. The Division will bill each licensee for
the assessment. The assessment must be paid within 30 days after the date the
bill is received.

3. A charge of 10 percent of the assessment
will be imposed on any licensee whose assessment is received by the Division
after the date on which the assessment is due.

(Added to NAC by Comm’r of Financial Institutions, eff.
12-17-87; A 5-27-92)

1. Only those employees of a thrift company
and independent appraisers who have received prior letters of acquiescence from
the Commissioner may appraise collateral taken by the company as security for a
loan.

2. Before the Commissioner will acquiesce in
the making of such appraisals by an employee of a thrift company or an independent
appraiser, the employee or independent appraiser must submit an application to
the Commissioner for his acquiescence. The application must be on a form
provided by the Commissioner.

3. Before the Commissioner will acquiesce in
the making of such appraisals by an employee of a thrift company, the employee
must submit adequate proof to the Commissioner that he has completed a
qualified course in appraisals or that he has substantial prior experience or
that he has completed at least 20 appraisals under the direction of a company
employee who has received a letter of acquiescence from the Commissioner to
make appraisals.

4. A copy of the Commissioner’s letter of
acquiescence for each appraiser must be kept on file by the thrift company in
each office in which his appraisals are being used.

NAC 677.330Market value of security. (NRS 677.380)The
market value of any collateral taken as security for a loan, or of any item
listed in subsection 1 of NRS
677.790, which is purchased, sold or discounted by the company must be
determined by:

1. Reference to a standard publication in
general use by the trade;

2. A copy of the bill of sale or purchase
invoice;

3. In the case of household goods, the value
of which is not relied upon by the licensee to secure the net amount of the
loan, a statement of value represented as true and correct by the borrower and
signed by him; or

(a) Is prepared by a company employee or an
independent appraiser who has been acquiesced in by the Commissioner to make
appraisals;

(b) Is in writing and signed by the appraiser;

(c) States the fair market value of the property
and the basis for arriving at the valuation of the property;

(d) Sufficiently identifies the collateral and the
transaction to which it pertains; and

(e) Describes the work done by the appraiser.

2. The Commissioner may require a
reappraisal of any property taken as security for a loan or any item listed in
subsection 1 of NRS 677.790
which is purchased, sold or discounted by the company. Such a reappraisal must
be performed by whomever the Commissioner designates and in accordance with
whatever standards the Commissioner sets. All costs incurred by such a
reappraisal must be borne by the licensee.

NAC 677.390Annual financial reports. (NRS 677.380)The
annual report required by NRS 677.400
must include, in addition to the information required by subsection 2 of NRS 677.400, a statement of changes
in the company’s capital accounts and the detail of the total borrowings outstanding,
exclusive of thrift certificates.

NAC 677.410Chargeoffs. (NRS 677.380, 677.460)Receivables
must be charged to the allowance for losses when the receivables fall within
any one of the following classifications:

1. Accounts on which no full contractual
payment has been made within the past 90 days or 90 days from the due date of
the first installment that is past due and unpaid. Before an account is charged
to the allowance for losses pursuant to this subsection, the balance may be
reduced by:

(a) The amount of any applicable insurance claim
which is pending if the claim is verified in writing by the insurance company.

(b) The recoverable value of any collateral, other
than real property, which has been repossessed by the licensee if he disposes
of the collateral within 90 days after it is repossessed.

2. Accounts on which six contractual
payments, due within the preceding 12 months, are past due and unpaid.

3. The debtor is deceased, his estate is
without known assets and his obligation is not covered by credit life
insurance.

4. The debtor has filed for a discharge in
bankruptcy, but the account may be considered renewed or revised if at least
three contractual payments have been received after the debtor has reaffirmed
his obligation or if one or more contractual payments have been received after
he has filed under Chapter XIII of the Bankruptcy Act.

5. The location of the debtor is unknown
after a conscientious effort has been made to locate the debtor.

6. Accounts on which any balance is due
after sale of repossessed collateral unless one or more contractual payments
have been received after such sale.

1. When an account is secured by real
property and its status places it in a chargeoff classification, the amount
charged to the allowance for credit losses may be reduced by the value of the
real property, if any.

2. The value of such real property must be
its estimated sales price on a “forced-sale” basis, less estimated costs of
sale and any senior encumbrances.

1. Receivables must be reviewed at least
once each month, and accounts subject to chargeoff must be charged to the
allowance for credit losses not later than the 15th day of the succeeding
month.

2. When a licensee is able to satisfy the
Commissioner that facts exist concerning an account which justify a smaller
chargeoff than is provided for in this chapter, the chargeoff may be reduced or
eliminated as determined by the Commissioner.

NAC 677.450Disclosure of fees and charges. (NRS 677.380)The
terms and conditions of all potential charges to a borrower, including any
charge for a default on an installment due, a deferment, a prepayment of the
loan, and a returned check, must be disclosed to the borrower in writing prior
to closing any loan.

1. Before the Commissioner will approve a
contract for the insurance of deposits that is issued by a private insurer
pursuant to subsection 2 of NRS
677.247, the licensee must, in addition to satisfying the requirements of
subsection 2 of NRS 677.247:

(a) Create and maintain reserves of not less than 5
percent of deposits in a form set forth in subsection 1 of NRS 677.230;

(b) File with the Commissioner a fidelity bond
pursuant to NRS 677.170 that
provides fidelity coverage on each officer, director and employee of at least
$300,000;

(c) Maintain stockholders’ equity of not less than
$500,000 plus an additional $50,000 for each branch office of the thrift
company of the licensee;

(d) Agree to forego entering into a contract for
the insurance of deposits with a private insurer that is an affiliated business
organization unless the contract has been approved by the Commissioner and the
Commissioner of Insurance; and

(e) Comply with any applicable provisions of
federal law.

2. If the Commissioner withdraws his
approval from a contract for the insurance of deposits pursuant to subsection 2
of NRS 677.247 because a
licensee or private insurer who is a party to the contract violates a provision
of this chapter or chapter 677 of NRS,
the licensee or private insurer may request a hearing before the Commissioner.
The Commissioner will schedule and hold such a hearing pursuant to chapter 233B of NRS.

3. If the Commissioner of Insurance
withdraws his approval from a contract for the insurance of deposits pursuant
to subsection 2 of NRS 677.247
because a licensee or private insurer who is a party to the contract violates a
provision of title 57 of NRS or the regulations adopted pursuant thereto, the
licensee or private insurer may request a hearing before the Commissioner of
Insurance pursuant to NRS 679B.310.

4. As used in this section:

(a) “Affiliated business organization” means a
business organization, including, without limitation, a corporation or
partnership that controls, is controlled by or is under common control with the
business organization of a licensee.

(b) “Stockholders’ equity” has the meaning ascribed
to it in NRS 677.125.

(Added to NAC by Comm’r of Financial Institutions by
R101-01, eff. 11-15-2001)

1. Before the Commissioner will approve a
contract for the insurance of deposits that is issued by a private insurer
pursuant to subsection 2 of NRS
677.247, a private insurer must:

(a) Be licensed in this State by the Commissioner
of Insurance;

(b) Be rated within one of the five highest rating
categories by a national rating service or hold a certificate of authority as
an acceptable surety on federal bonds issued by the Secretary of the Treasury
pursuant to 31 C.F.R. § 223.3; and

(c) Agree to:

(1) Submit quarterly and annual financial
statements to the Commissioner and the Commissioner of Insurance;

(2) Maintain an investment portfolio that
includes assets of sufficient liquidity to reimburse depositors fully and
promptly for any losses which the depositors may incur, including, without
limitation, cash, reinsurance and lines of credit; and

(3) Create and maintain reserves of not less
than 15 percent of the amount of the insured deposits in the form of:

1. In determining whether a private insurer
is acceptable to issue a contract for the insurance of deposits, the
Commissioner will consider:

(a) The value of the insurer’s capital;

(b) The qualifications of the directors, officers
and managers of the insurance company;

(c) The insurer’s articles of incorporation and its
bylaws and all amendments thereto;

(d) The insurer’s policies for investments; and

(e) The form of all insurance contracts entered
into by the insurer, including contracts for reinsurance.

2. After a private insurer obtains the
approval of the Commissioner and the Commissioner of Insurance to issue a
contract for the insurance of deposits, the Commissioner, after consultation
with the Commissioner of Insurance, may, for cause, require the insurer to
establish and maintain, for such a time as the Commissioner may require, an
additional reserve, in cash or United States treasury bills or notes, in an
amount fixed by the Commissioner. If required, the reserve must be kept in an
account approved by the Commissioner in a federally insured financial
institution located in this State.

(Added to NAC by Comm’r of Financial Institutions by
R101-01, eff. 11-15-2001)

1. A licensee who has obtained a contract
for the insurance of deposits that is issued by a private insurer pursuant to
subsection 2 of NRS 677.247
shall, before accepting a deposit from a person, require that person to sign
and date a form which contains a disclosure written in substantially the
following form:

Your deposit is not insured by the
Federal Deposit Insurance Corporation or any other federal or state entity. The
deposits with this thrift company are insured only by a private insurer. The
name of the private insurer that is insuring your deposit is......(insert name
of private insurer). You are advised to fully consider this issue before
depositing money with this company.

2. The disclosure set forth in subsection 1
must be printed in at least 8-point bold type. The licensee may place the
disclosure on a form that contains other information if the block for the
signature and date are in close proximity to the text of the disclosure.

3. The licensee shall:

(a) Provide a copy of the form with the signed
disclosure to each person who deposits money with the thrift company of the
licensee;

(b) Retain the original form with the signed
disclosure for at least 6 years after the form is signed;

(c) Present the original or a copy of the
disclosure upon request by the Commissioner or an employee of the Division of
Financial Institutions designated by the Commissioner;

(d) Post a placard with the disclosure printed on
it in at least 14-point bold type:

(1) At the main entrance to the principal
office and each branch office of the thrift company of the licensee; and

(2) In a conspicuous place at each teller’s
window located at the principal office and each branch office of the thrift
company of the licensee; and

(e) Comply with any other applicable disclosure
requirements set forth in federal law.

(Added to NAC by Comm’r of Financial Institutions by
R101-01, eff. 11-15-2001)

NAC 677.540Examination by Commissioner of Insurance. (NRS 677.247, 677.380)The
Commissioner may request that the Commissioner of Insurance:

1. Conduct an examination, in the manner set
forth in chapter 679B of NRS, of a
private insurer that issues a contract for the insurance of deposits pursuant
to subsection 2 of NRS 677.247;
and

2. Report the results of the examination to
the Commissioner within 60 days of receipt of such a request.

(Added to NAC by Comm’r of Financial Institutions by
R101-01, eff. 11-15-2001)

1. A private insurer that issues a contract
for the insurance of deposits pursuant to subsection 2 of NRS 677.247 shall notify the
Commissioner within 3 business days after the private insurer has knowledge of
any change:

(a) In the ownership of 10 percent or more of the
outstanding voting stock of the private insurer if the private insurer is a
corporation; or

(b) Of the partners of the private insurer if the
private insurer is a partnership.

2. Within 60 days after receipt of a notice
of change pursuant to subsection 1, the Commissioner will approve or disapprove
the continuance of the insurance of deposits by the private insurer.

3. If the Commissioner disapproves the
continuance of the insurance of deposits by the private insurer, the private
insurer may request a hearing before the Commissioner. The Commissioner will
schedule and hold such a hearing pursuant to chapter 233B of NRS.

(Added to NAC by Comm’r of Financial Institutions by
R101-01, eff. 11-15-2001)

1. If a licensee, or an authorized
representative of that licensee, fails to respond to the Commissioner of
Financial Institutions within 20 business days after receipt of a written
notice that a complaint has been filed against the licensee, the licensee is
deemed to have admitted to the allegations contained in the complaint.

2. Subject to the discretion of the
Commissioner of Financial Institutions and except as otherwise provided by
specific statute, a complaint filed with the Division of Financial Institutions
of the Department of Business and Industry, any documents filed with the
complaint, and any report or information resulting from an investigation of the
complaint are confidential.

(Added to NAC by Comm’r of Financial Institutions by
R109-06, eff. 6-28-2006)

NAC 677.620Suspension or revocation of license. (NRS 677.380, 677.510)The
Commissioner of Financial Institutions may suspend or revoke a license in
accordance with NRS 677.480 to 677.570, inclusive, if the licensee
violates any provision of this chapter or chapter
677 of NRS, including, without limitation, a provision that imposes a fee
or assessment on a licensee.

(Added to NAC by Comm’r of Financial Institutions by
R109-06, eff. 6-28-2006)